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☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Delaware						82-3410369
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)
201 King of Prussia Road, Suite 350 Wayne, Pennsylvania						19087
(Address of Principal Executive Offices)						(Zip Code)

Title of each class			Trading Symbol(s)			Name of each exchange on which registered
Common Stock			BMTX			NYSE American LLC
Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share.			BMTX-WT			NYSE American LLC

Act. Yes ☐ No ☒

Act. Yes ☐No ☒

Large accelerated filer			☐			Accelerated filer			☐
Non-accelerated filer			☒			Smaller reporting company			☒
						Emerging growth company			☒

Act. Yes ☐ No  ☒ 

			Page
Part I			1
Item 1. Business			1
Item 1A. Risk Factors			3
Item 1B. Unresolved Staff Comments			19
Item 2. Properties			19
Item 3. Legal Proceedings			19
Item 4. Mine Safety Disclosures			19
Part II			20
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			20
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations			20
Item 7A. Quantitative and Qualitative Disclosures About Market Risk			28
Item 8. Consolidated Financial Statements and Supplementary Data			28
Index to Consolidated Financial Statements			29
Report of Independent Registered Public Accounting Firm			30
Consolidated Balance Sheets			31
Consolidated Statements of Income (Loss)			32
Consolidated Statements of Changes in Shareholders’ Equity			33
Consolidated Statements of Cash Flows			34
Notes to the Consolidated Financial Statements			35
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures			74
Item 9A. Controls and Procedures			75
Item 9B. Other Information			77
Part III			79
Item 10. Directors, Executive Officers and Corporate Governance			79
Item 11. Executive Compensation			79
Item 12. Security Ownership of Certain Beneficial Owner and Management and Related Stockholder Matters			79
Item 13. Certain Relationships and Related Transactions, and Director Independence			80
Item 14. Principal Accounting Fees and Services			80
Part IV			80
Item 15. Exhibits, Financial Statement Schedules			81
Item 16. Form 10-K Summary			82
Signatures			83

References in this report to “the Company,” “BMTX,” “we,” “us,” and “our” refer to Megalith Financial Acquisition Corporation prior to the Closing of the business combination and to BM Technologies, Inc., a Delaware corporation after the Closing of the business combination. References to our “management” or our “management team” refer to our officers and directors.

a.Dependence on key individuals;

b.Our limited operating history;

c.Our ability to identify, recruit and retain skilled personnel;

d.Our ability to implement our strategy;

e.Growth of adoption and retention rates;

f.Our ability to manage growth effectively;

g.Assumptions related to our growth strategy;

h.Our partnership and private label agreement with T-Mobile;

i.Our ability to expand our market reach and product portfolio;

j.Our product cycle;

k.Competition;

l.The strength of our brand;

m.The risk of systems or product failures;

n.Demand for banking products and services;

o.Changes in the demand or availability of student loans or financial aid;

p.The effects of COVID and global and general economic conditions;

q.Changes in government financial aid regime;

r.Data breaches, fraud and cybersecurity issues;

s.Infringement of our intellectual property or allegations of infringement by us;

t.Termination of or changes to the MasterCard association registration;

u.Our fees and charges;

v.Outsourcing critical operations;

w.Ability to maintain an effective system of disclosure controls and internal control over financial reporting;

x.Our ability to integrate future acquisitions;

y.Our ability to realize the anticipated benefits of our announced merger with First Sound Bank; and

z.Our ability to consummate the merger with First Sound Bank.

a.Whether an active, liquid trading market for our common stock is sustained;

b.Coverage by securities analysts;

c.Future sales of common stock;

d.Anti-takeover provisions and forum selection clauses under our charter and Delaware law;

e.Our ability to redeem unexpired warrants; and

f.Exercises of warrants increasing the number of shares eligible for future resale and dilution to stockholders.

a.Changes in regulation related to interchange or methods of payments;

b.Regulations related to higher education and disbursements; and

c.Regulation applicable to our Partner Bank, Customers Bank, which is a related party of the Company.

a.Adequacy of insurance;

b.The limited experience of our management team in managing a public company; and

c.Capitalized assets could become impaired.

We are a financial technology (“fintech”) company that facilitates deposits and banking services between a customer and our Partner Bank, Customers Bank, which is a related party and is a Federal Deposit Insurance Corporation (“FDIC”) insured bank. We provide state-of-the-art high-tech digital banking and disbursement services to consumers and students nationwide through a full service fintech banking platform, accessible to customers anywhere and anytime through digital channels. Our FinTech business model leverages partners’ existing customer bases to achieve high volume, low-cost customer acquisition in our Disbursement, Banking-as-a-Service (“BaaS”), and Workplace Banking businesses.

We are not a bank, do not hold a bank charter, and do not provide banking services. Our Partner Bank is subject to regulation  by  the  Pennsylvania Department of Banking and Securities and the Federal Reserve Bank, and is periodically examined by those regulatory authorities. We are subject to the regulations of the Department of Education (“ED”), due to our Disbursement business, and are periodically examined by them.

BankMobile Technologies, Inc. was incorporated in May 2016 as a wholly-owned subsidiary of Customers Bank. On August 6, 2020, the Company entered into an Agreement and Plan of Merger, by and among Megalith Financial Acquisition Corporation, a special purpose acquisition company, incorporated in Delaware in November 2017, MFAC Merger Sub Inc., a wholly-owned subsidiary of Megalith, BankMobile Technologies, Inc. and Customers Bank, a Pennsylvania state chartered bank and the sole stockholder of BankMobile. On January 4, 2021, BankMobile Technologies, Inc. became an independent company after the completion of a divestiture transaction and was rebranded BM Technologies, Inc.

You should carefully consider all of the risks described below, together with the other information contained in this report, including the financial statements, before making a decision to invest in our securities. If any of the following risks occur, our business, financial condition or operating results may be materially and adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment. In this section, “we,” “us,” and “our,” refers to the consolidated Company.

•Our growth strategy is depending on adding additional BaaS partners. The timing, size, and partnership terms are not fully known today and could have a significant impact on our outlook and results of operations. Currently, T-Mobile is our only material BaaS partner.

•Our current BaaS business is significantly dependent on our BaaS business with T-Mobile, and T-Mobile’s efforts to market the program and promote growth in accounts. If T-Mobile does not market the product as expected, or if there are changes in the economic relationship with T-Mobile or its investment appetite in the business, it could impact our financial projections and results of operations.

•Workplace Banking is a new and relatively unproven strategy; our outlook is based on estimated penetration rates of large employers, benefits market places, and other FinTech companies involved in payment of wages. Those companies may not market the product as effectively as projected or utilize our platform to the extent projected; other unknown factors in this new business, such as the rate of adoption, promotional costs, and costs of signing new partners, may cause results to materially differ from our estimates.

•Macro industry trends may impact the amounts of student disbursements or the likelihood that students choose a BankMobile-serviced account. ED regulation, industry competition, the rise of competing low-cost products, or other unknown shifts could impact the growth in the student business. The lasting impact of COVID-19 on the higher education industry is still unknown, but changes in enrollment at our client schools or changes in the amounts disbursed could negatively impact projections and results of operations. Student revenue growth is dependent on our ability to charge the current level of fees, which could be negatively impacted by competition or changes in industry trends. Revenue growth is also dependent on interchange income rates, ATM visits, and other factors that may shift over time.

•Interest rates are unknown; higher rates of interest may reduce the relative attractiveness of the deposit products we service for our partner banks. Interest rate changes may reduce the deposit servicing fee that is paid to us by our Partner Bank or that we can charge to future partner banks.

•Future bank partnerships will have individually negotiated terms; the economics of those partnerships may differ from the current arrangement. We have a commitment from our Partner Bank through the end of 2022, but we may not be able to secure similar terms after that time.

•In November 2021, we announced a bank merger that will enable us to keep deposits on our own Consolidated Balance Sheets; but until the merger closes, we must maintain deposits off-balance sheet with our Partner Bank. Only after the merger closes, can we begin to move these deposits onto our Consolidated Balance Sheets. After we move deposits to our Consolidated Balance Sheets, our servicing fee income will be replaced by net interest income which will be determined by our asset mix, yields, and deposit cost.

•the individual decision-making processes of each higher education institutional client, BaaS partner or large employer, which typically include extensive and lengthy evaluations and will require spending substantial time, effort and money educating each client and partner about the value of our products and services;

•the budgetary constraints and priorities and budget cycle of each higher education institutional client or partner;

•the reluctance of higher education staff, BaaS partners or large employers to change or modify existing processes and procedures; and

•the amount of customization and negotiation required for any given collaboration.

•you may not be able to liquidate your investment in shares of common stock;

•you may not be able to resell your shares of common stock at or above the price attributed to them in the business combination;

•the market price of shares of common stock may experience significant price volatility; and

•there may be less efficiency in carrying out your purchase and sale orders.

•provisions that authorize our board of directors, without action by our stockholders, to authorize by resolution the issuance of shares of preferred stock and to establish the number of shares to be included in such series, along with the preferential rights determined by our board of directors;

•provided that, our board of directors may also, subject to the rights of the holders of preferred stock, authorize shares of preferred stock to be increased or decreased by the approval of the board of directors and the affirmative vote of the holders of a majority in voting power of the outstanding shares of capital stock of the corporation;

•provisions that impose advance notice requirements, minimum shareholding periods and ownership thresholds, and other requirements and limitations on the ability of stockholders to propose matters for consideration at stockholder meetings; and

•a staggered board whereby our directors are divided into three classes, with each class subject to retirement and reelection once every three years on a rotating basis.

Our common stock and warrants are each traded on the NYSE American Market under the symbols “BMTX,” “BMTX-WT,” respectively.

On May 3, 2022, there were 720 holders of record of our common stock and 17 holders of record of our warrants.

As of December 31, 2021 the Company had registered 1,720,037 total shares of common stock under the 2020 Equity Incentive Plan (1,220,037 shares) and the 2021 Employee Stock Purchase Plan (500,000 shares).

None.

As of December 31, 2021, the Company has reacquired 14,500 forfeited shares of its common stock due to failure of the recipients to satisfy the required vesting conditions.

•Debit card POS spend (higher education and new business). Spend represents the dollar amount that our customers spend on their debit cards through a signature or PIN network. Spend is a key performance indicator, as the company earns a small percentage of every dollar spent as interchange income and spend is the primary driver of our card revenues.

•Serviced deposits (ending and average; higher education and new business). Serviced deposits represent the dollar amount of deposits that are in customer accounts serviced by our Company. Our deposit servicing fee is based on a contractual arrangement with our Partner Bank and the average balance of serviced deposits is the primary driver of our deposit servicing fees. Average deposits have the strongest correlation to current period serviced deposits, but ending deposits provide information at a point in time and serve as the starting point for the following period.

•Higher education retention. Retention is a key measure of our value proposition with higher education customers. We measure retention in terms of Signed Student Enrollments (SSEs), which represents the number of students enrolled at higher education institutions. Retention is calculated by subtracting lost SSEs from starting SSEs and taking that amount as a percentage of the starting SSEs.

•Higher education financial aid refund disbursement. Represents the dollar amount of all funds that we process for a college or university partner, whether it is distributed by ACH, check, or into a BankMobile Vibe account. This is a measure of the business we process for our higher education partners in exchange for their subscription and other fees, as well as a measure of the potential that we have the opportunity to capture into our serviced accounts.

•Higher education organic deposits. Organic deposits represent the dollar total of all deposits made into a higher education BankMobile Vibe account except for funds processed through a college or university partner. Because this includes funds that the account holder adds to the account and excludes the funds processed through the higher education institution, it is viewed as a strong indicator of traction with the customer.

We have adopted various accounting policies that govern the application of U.S. GAAP and that are consistent with general practices within the fintech industry in the preparation of these financial statements. Our significant accounting policies are described in Note 2 - Basis of Presentation and Significant Accounting Policies in the Notes to the Consolidated Financial Statements herein.

Other intangibles subject to amortization are reviewed for impairment under FASB ASC 360, Property, Plant and Equipment, which requires that a long-lived asset or asset group be tested for recoverability whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The carrying value of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset.

The Private Warrants and the Public Warrants are treated differently for accounting purposes. In accordance with FASB ASC Topic 480, Distinguishing Liabilities from Equity, the Private Warrants are accounted for as liabilities and will be marked-to-market each reporting period with the change recognized in earnings. In general, under the mark-to-market accounting model, as the Company’s stock price increases, the warrant liability increases, and the Company recognizes additional expense in its Consolidated Statements of Income (Loss) – the opposite when the stock price declines. Accordingly, the periodic revaluation of the Private Warrants could result in significant volatility in our reported earnings. The amounts recognized are a mark-to-market accounting determination and are non-cash.

In accordance with FASB ASC Topic 480, Distinguishing Liabilities from Equity, for accounting purposes the Public Warrants are treated as equity instruments. Accordingly, the Public Warrants are not marked-to-market each reporting period, thus there is no impact to earnings. Any future exercises of the Public Warrants will be recorded as cash received and recorded in Cash and cash equivalents, with a corresponding offset to Additional paid-in capital in equity.

The FASB has issued accounting standards that have not yet become effective and that may impact BMTX’s consolidated financial statements or its disclosures in future periods. Note 2 — Basis of Presentation and Significant Accounting Policies provides information regarding those accounting standards.

The following discussion of our results of operations should be read in conjunction with our Consolidated Financial Statements, including the accompanying notes. The following summarized tables set forth our operating results for the twelve months ended December 31, 2021 and December 31, 2020:

						Twelve Months Ended December 31,																		% Change
						2021						2020
(dollars in thousands, except per share data)												(As Restated)						Change
Operating revenues						$	94,987					$	66,437					$	28,550					43		%
Operating expenses						89,321						77,233						12,088						16		%
Income (loss) from operations						5,666						(10,796)						16,462						NM
Gain on fair value of private warrant liability						17,225						—						17,225						100		%
Interest expense						(96)						(1,395)						1,299						(93)		%
Income (loss) before income tax expense						22,795						(12,191)						34,986						NM
Income tax expense						5,752						23						5,729						NM
Net income (loss)						$	17,043					$	(12,214)					$	29,257					NM
Net Income (loss) per share - basic						$	1.44					$	(1.99)					$	3.43					NM
Net Income (loss) per share - diluted						$	1.43					$	(1.99)					$	3.42					NM

For the twelve months ended December 31, 2021, we had substantially higher operating profitability as compared to the twelve months ended December 31, 2020. The increase was almost entirely due to additional revenues which increased 43% as compared to the prior year as compared to operating expenses which increased by only 16% resulting in improved operating profitability. The increase in revenue is primarily driven by an increase in Servicing fees from Partner Bank which increased $22.6 million as compared to the prior period. In addition to increased income from operations, we experienced a year to date gain on the fair value of the private warrant liability and decreased interest expense. The resulting increased profitability for the period drove an increase in income tax expense for the period. The increased profitability as compared to the prior period was reflected in our Basic and Diluted Earnings Per Share amounts which increased to $1.44 and $1.43 for the twelve months ended December 31, 2021, respectively as compared to $(1.99) for both Basic and Diluted Earnings Per Share for the twelve months ended December 31, 2020. The reasons for these movements in revenue and expenses are discussed in further detail below.

						Twelve Months Ended December 31,																		% Change
						2021						2020
(dollars in thousands)												(As Restated)						Change
Revenues:
Interchange and card revenue						$	28,078					$	25,864					$	2,214					9		%
Servicing fees from Partner Bank						45,105						22,465						22,640						101		%
Account fees						10,668						11,308						(640)						(6)		%
University fees						5,693						5,320						373						7		%
Other revenue						5,443						1,480						3,963						NM
Total operating revenues						$	94,987					$	66,437					$	28,550					43		%

						Twelve Months Ended December 31,																		% Change
(dollars in thousands)						2021						2020						Change
Technology, communication, and processing						$	28,973					$	27,404					$	1,569					6		%
Salaries and employee benefits						38,036						26,076						11,960						46		%
Professional services						10,395						9,304						1,091						12		%
Provision for operating losses						5,419						5,170						249						5		%
Occupancy						1,197						1,428						(231)						(16)		%
Customer related supplies						2,214						3,236						(1,022)						(32)		%
Advertising and promotion						654						941						(287)						(30)		%
Merger and acquisition related expenses						65						739						(674)						(91)		%
Other expense						2,368						2,935						(567)						(19)		%
Total operating expenses						$	89,321					$	77,233					$	12,088					16		%

For the twelve months ended December 31, 2021, operating expenses increased $12.1 million, or 16% as compared to the twelve months ended December 31, 2020. This increase is primarily attributable to a $12.0 million increase in Salaries and employee benefits, a $1.6 million increase in Technology, communication, and processing, and a $1.1 million increase in Professional services. The increase in Salaries and employee benefits included $9.5 million for the January 4th, 2021 share-based compensation award and $0.8 million for the accelerated vesting of restricted stock units and stock options previously granted by our former parent to certain of the Company’s employees in connection with the divestiture of the Company, and $1.0 million for executive restricted share units granted during 2021. The increase in Technology, communication, and processing expense year-over-year reflects an increase in stand-alone technology and cloud computing costs, as well as lower partner reimbursements of certain technology costs in 2021. These increases were partially offset by a $1.0 million decrease in Customer related supplies, a $0.7 million decrease in Merger and acquisition related expenses, and a $0.6 million decrease in Other expense.

The Company’s effective tax rate was 25.2% for the twelve months ended December 31, 2021. The effective tax rate differs from the Company’s federal statutory rate of 21.0% due to the non-taxable fair value adjustments related to the non-compensatory private warrant liability being recorded through earnings as well as tax expense related to the estimated annual increase of the valuation allowance established against deferred tax assets.

We currently finance our operations through cash flows provided by operating activities. We had a substantial increase in cash from operating activities in the twelve months ended December 31, 2021 compared to the twelve months ended December 31, 2020. We had $25.7 million of Cash and cash equivalents as of December 31, 2021.

						Twelve Months Ended December 31,																		% Change
						2021						2020
(dollars in thousands)												(As Restated)						Change
Net cash provided by operating activities						$	27,543					$	16,038					$	11,505					72		%
Net cash used in investing activities						(733)						(4,020)						3,287						(82)		%
Net cash used in financing activities						(4,095)						(17,615)						13,520						(77)		%
Net increase (decrease) in cash and cash equivalents						$	22,715					$	(5,597)					$	28,312					NM

NM refers to changes greater than 150%.

Cash provided by operating activities was $27.5 million in the twelve months ended December 31, 2021 compared to cash provided of $16.0 million in the twelve months ended December 31, 2020, an increase of $11.5 million. The increase was driven primarily by the increase in Income (loss) from operations for the twelve months ended December 31, 2021 as compared to the prior year.

During the twelve months ended December 31, 2021, BMTX repaid its debt outstanding. Note 7 - Borrowings from Partner Bank in the Notes to the Consolidated Financial Statements herein provides additional information. There were no other material changes in our contractual obligations during the twelve months ended December 31, 2021.

A summary of the Company’s outstanding contractual obligations as of December 31, 2021 is as follows:

						Payments Due by Period
(dollars in thousands)						Within 1 year						1 to 3 years						More than 3 years						Total Amounts Committed
Operating leases						$	418					$	—					$	—					$	418
						$	418					$	—					$	—					$	418

As of December 31, 2021, we did not have any off-balance sheet arrangements.

At December 31, 2021 and December 31, 2020, our Partner Bank accounted for 61% and 31% (As Restated) of our total Accounts receivable, net, respectively. At December 31, 2021 and December 31, 2020, a BaaS partner accounted for 13% and 46% (As Restated) of our total Accounts receivable, net, respectively. MasterCard accounted for 17% (As Restated) of our total Accounts receivable, net at both December 31, 2021 and December 31, 2020.

Financial instruments that potentially subject the Company to credit risk consist principally of cash held in the Company's operating account. Cash is maintained in accounts with our Partner Bank, which, at times may exceed the FDIC coverage of $250,000. At December 31, 2021, the Company has not experienced losses on these cash accounts and management believes, based upon the quality of the our Partner Bank, that the credit risk with regard to these deposits is not significant.

			Page No.
Report of Independent Registered Public Accounting Firm (BDO USA, LLP; Philadelphia, PA; PCAOB ID#243) (BDO USA, LLP; Philadelphia, PA; PCAOB ID#243)			30
Consolidated Balance Sheets			31
Consolidated Statements of Income (Loss)			32
Consolidated Statements of Changes in Shareholders’ Equity			33
Consolidated Statements of Cash Flows			34
Notes to the Consolidated Financial Statements			35

We have audited the accompanying consolidated balance sheets of BM Technologies, Inc. (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of income (loss), stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2021, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

As disclosed in Note 2 – Customer and Vendor Concentrations and Note 14 – Relationship with our Partner Bank, to the consolidated financial statements for the twelve months ended December 31, 2021 and 2020, the Company’s Partner Bank accounted for 87% and 86% of its Total operating revenues, respectively, through a Deposit Servicing Agreement. See Note 15 - Subsequent Events for the recent statement that the Company’s Partner Bank will not renew the Deposit Servicing Agreement when it expires on December 31, 2022. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

			December 31, 2021						December 31, 2020
									(As Restated)
ASSETS
Cash and cash equivalents			$	25,704					$	2,989
Accounts receivable, net allowance for doubtful accounts of $79 and zero at December 31, 2021 and December 31, 2020, respectively.			9,161						10,033
Prepaid expenses and other current assets			1,779						2,348
Total current assets			36,644						15,370
Premises and equipment, net			346						401
Developed software, net			28,593						39,657
Goodwill			5,259						5,259
Other intangibles, net			4,749						5,070
Other assets			837						853
Total assets			$	76,428					$	66,610
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Accounts payable and accrued liabilities			$	7,033					$	7,521
Taxes payable			1,807						—
Borrowings from Partner Bank			—						21,000
Current portion of operating lease liabilities			416						701
Deferred revenue, current			15,387						10,588
Total current liabilities			24,643						39,810
Non-current liabilities:
Operating lease liabilities			—						430
Deferred revenue, non-current			190						2,101
Liability for private warrants			13,614						—
Total liabilities			$	38,447					$	42,341
Commitments and contingencies (Note 8)
Shareholders’ equity:
Preferred stock: Par value $0.0001 per share; 10,000,000 authorized, none issued or outstanding at both December 31, 2021 and December 31, 2020.			$	—					$	—
Common stock: Par value $0.0001 per share; 1 billion shares authorized; 12,193,378 shares issued and outstanding at December 31, 2021; 6,123,432 shares issued and outstanding at December 31, 2020.			1						1
Additional paid-in capital			60,686						64,017
Accumulated deficit			(22,706)						(39,749)
Total shareholders’ equity			$	37,981					$	24,269
Total liabilities and shareholders’ equity			$	76,428					$	66,610

			Twelve Months Ended December 31,
			2021						2020
									(As Restated)
Operating revenues:
Interchange and card revenue			$	28,078					$	25,864
Servicing fees from Partner Bank			45,105						22,465
Account fees			10,668						11,308
University fees			5,693						5,320
Other revenue			5,443						1,480
Total operating revenues			94,987						66,437
Operating expenses:
Technology, communication, and processing			28,973						27,404
Salaries and employee benefits			38,036						26,076
Professional services			10,395						9,304
Provision for operating losses			5,419						5,170
Occupancy			1,197						1,428
Customer related supplies			2,214						3,236
Advertising and promotion			654						941
Merger and acquisition related expenses			65						739
Other expense			2,368						2,935
Total operating expenses			89,321						77,233
Income (loss) from operations			5,666						(10,796)
Non-operating income and expense:
Gain on fair value of private warrant liability			17,225						—
Interest expense			(96)						(1,395)
Income (loss) before income tax expense			22,795						(12,191)
Income tax expense			5,752						23
Net income (loss)			$	17,043					$	(12,214)
Weighted average number of shares outstanding - basic			11,851						6,123
Weighted average number of shares outstanding - diluted			11,939						6,123
Net Income (loss) per share - basic			$	1.44					$	(1.99)
Net Income (loss) per share - diluted			$	1.43					$	(1.99)

			Common Stock
			Shares of Common Stock Outstanding						Common Stock						Additional Paid-in Capital						Accumulated Deficit						Total
Balance at December 31, 2019(1)			6,123,432						$	1					$	62,164					$	(27,535)					$	34,630
Net loss (As Restated)			—						—						—						(12,214)						(12,214)
Capital contribution from Partner Bank			—						—						1,385						—						1,385
Share-based compensation expense			—						—						468						—						468
Balance at December 31, 2020 (As Restated)			6,123,432						$	1					$	64,017					$	(39,749)					$	24,269
Net income			—						—						—						17,043						17,043
Valuation of private warrants			—						—						(30,839)						—						(30,839)
Recapitalization transaction			4,759,911						—						16,148						—						16,148
Issuance of common stock as compensation			1,308,535						—						9,518						—						9,518
Issuance of common stock upon exercise of warrants			1,500						—						17						—						17
Share-based compensation expense			—						—						1,825						—						1,825
Balance at December 31, 2021			12,193,378						$	1					$	60,686					$	(22,706)					$	37,981

			Twelve Months Ended December 31,
			2021						2020
									(As Restated)
Cash Flows from Operating Activities:
Net income (loss)			$	17,043					$	(12,214)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation of premises and equipment			193						310
Amortization of developed software			11,444						11,047
Amortization of other intangible assets			321						664
Amortization of leased assets			820						1,253
Impairment of software assets			215						3,721
Share-based compensation expense			11,343						468
Gain on fair value of private warrant liability			(17,225)						—
Changes in operating assets and liabilities:
Accounts receivable, net			872						1,306
Prepaid expenses and other current assets			569						6,456
Other assets			(804)						372
Accounts payable and accrued liabilities			(1,228)						(3,572)
Taxes payable			1,807						—
Operating lease liabilities			(715)						(1,406)
Deferred revenue			2,888						10,751
Other liabilities			—						(3,118)
Net Cash Provided by Operating Activities			27,543						16,038
Cash Flows from Investing Activities:
Purchase or development of internal use software			(595)						(3,947)
Purchases of premises and equipment			(138)						(73)
Net Cash Used in Investing Activities			(733)						(4,020)
Cash Flows from Financing Activities:
Repayments of borrowings from Partner Bank			(21,000)						(19,000)
Capital contribution from Partner Bank			—						1,385
Proceeds from Recapitalization transaction			16,888						—
Proceeds from exercise of warrants			17						—
Net Cash Used in Financing Activities			(4,095)						(17,615)
Net Increase (Decrease) in Cash and Cash Equivalents			22,715						(5,597)
Cash and Cash Equivalents – Beginning			2,989						8,586
Cash and Cash Equivalents – Ending			$	25,704					$	2,989
Supplementary Cash Flow Information:
Income taxes paid, net of refunds			$	4,224					$	—
Interest paid			$	178					$	—
Noncash Operating, Investing and Financing Activities:
Shares issued to settle Megalith accounts payable in connection with Recapitalization transaction			$	740					$	—
Share-based compensation expense recorded as capital contribution from Partner Bank			$	—					$	468

(amounts in thousands)
Cash at Megalith						$	27,669
Cash from PIPE (private investment in public entity) investors						20,003
Total sources of cash						47,672
Cash paid to underwriters and other transaction costs						(3,987)
Cash paid to Customers Bank as consideration						(23,125)
Cash from recapitalization transaction (A)						20,560
Cash used to pay down BMTX debt						(8,834)
Cash received by BMTX and used to pay down debt						(6,738)
Total cash used to pay down outstanding debt (B)						(15,572)
Net cash received by BMTX from the reverse recapitalization transaction through March 31, 2021 (A+B)						4,988
90 day merger true-up, cash paid by BMTX in May 2021						(3,672)
Final cash received by BMTX from the reverse recapitalization transaction through December 31, 2021						$	1,316

Shares held by legacy BankMobile shareholders - December 31, 2020						6,123,432
Shares related to the recapitalization transaction - January 4, 2021						6,076,946
Total shares issued and outstanding - January 4, 2021						12,200,378

•Customers Bank stockholders had the largest portion of voting rights in the post-combination company;

•The board of directors and senior management of the post-combination company are primarily composed of individuals associated with BankMobile;

•BankMobile was the larger entity based on historical operating activity, assets, revenues and employees at the time of the closing of the merger;

•The ongoing operating activities of the post-combination company comprise those of BankMobile; and

•BankMobile paid a premium in the exchange of equity interests.

At December 31, 2021 and December 31, 2020, our Partner Bank accounted for 61% and 31% (As Restated) of our total Accounts receivable, net, respectively. At December 31, 2021 and December 31, 2020, a BaaS partner accounted for 13% and 46% (As Restated) of our total Accounts receivable, net, respectively. MasterCard accounted for 17% (As Restated) of our total Accounts receivable, net at both December 31, 2021 and December 31, 2020.

For the twelve months ended December 31, 2021 and 2020, our Partner Bank, through a Deposit Processing Services Agreement, accounted for 87% and 86% of our Total operating revenues, respectively. See Note 14 – Relationship with our Partner Bank for additional information. Certain of these revenues are paid directly by MasterCard or individual account holders to the Company. On April 27, 2022, our Partner Bank indicated in a public filing that it will not renew the current Deposit Processing Services Agreement with the Company when it expires on December 31, 2022. See Note 15 - Subsequent Events for additional information.

For the twelve months ended December 31, 2021 and 2020, there is one vendor that accounted for 12% and 18% of our Total operating expenses, respectively.

Certain prior period amounts have been reclassified to conform to the current period presentation. $2.4 million of expense for mailing and shipping costs that was previously included in Other expense is now included in Customer related supplies. In addition, $0.5 million of share-based compensation was previously disclosed as a component of Capital contribution from Customers Bank on the Consolidated Statements of Shareholders’ Equity, but is now disclosed as a separate financial statement line item entitled Share-based compensation expense.

Business combinations are accounted for by applying the acquisition method in accordance with FASB ASC 805, Business Combinations. Under the acquisition method, identifiable assets acquired and liabilities assumed are measured at their fair values as of the date of acquisition, and are recognized separately from goodwill. Results of operations of the acquired entity are included in the statement of income from the date of acquisition. BMTX recognizes goodwill when the acquisition price exceeds the estimated fair value of the net assets acquired.

Our cash is maintained at our Partner Bank, with a large majority of our cash balances at December 31, 2021 exceeding the Federal Deposit Insurance Corporation (“FDIC”)’s $250,000 insured limit per account. We have not experienced losses on cash balances exceeding the federally insured limits, but there can be no assurance that we will not experience such losses in the future.

Other intangibles subject to amortization are reviewed for impairment under FASB ASC 360, Property, Plant and Equipment, which requires that a long-lived asset or asset group be tested for recoverability whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The carrying value of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset.

As part of its qualitative assessment, BMTX reviewed regional and national trends in current and expected economic conditions, examining indicators such as GDP growth, interest rates and unemployment rates. BMTX also considered its own historical performance (through BankMobile), expectations of future performance, indicative deal values, and other trends specific to its industry. Based on its qualitative assessment, BMTX determined that there was no evidence of impairment of the balance of goodwill and other intangible assets. As of December 31, 2021 and 2020, Goodwill was $5.3 million and Other intangibles, net was $4.7 million and $5.1 million, respectively.

BMTX enters into lease agreements primarily for the use of office space, all of which are classified as operating leases. At lease commencement date, BMTX recognizes right-of-use (“ROU”) assets and lease liabilities measured at the present value of lease payments over the lease term. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease expense for rental payments are recognized on a straight-line basis over the lease term and are included in Occupancy expense. In addition to rent, BMTX pays taxes and maintenance expenses, including an annual increase in operating expenses over the initial year’s expenses under certain leases as variable lease payments.

Deferred revenue consists of payments received from customers, most significantly from our Partner Bank, prior to the performance of services. Deferred revenue is recognized over the service period on a straight-line basis or when the contractual performance obligation has been satisfied. The Company classifies deferred revenue on the Consolidated Balance Sheets in Deferred revenue, current and Deferred revenue, non-current.

In accordance with FASB ASC Topic 480, Distinguishing Liabilities from Equity, the Private Warrants are accounted for as liabilities and will be marked-to-market each reporting period with the change recognized in earnings. In general, under the mark-to-market accounting model, as the Company’s stock price increases, the warrant liability increases, and the Company recognizes additional expense in its Consolidated Statements of Income (Loss) – the opposite when the stock price declines. Accordingly, the periodic revaluation of the Private Warrants could result in significant volatility in our reported earnings. For the twelve months ended December 31, 2021, the Company recognized a gain of $17.2 million. The amounts recognized are a mark-to-market accounting determination and are non-cash.

In accordance with FASB ASC Topic 480, Distinguishing Liabilities from Equity, the Public Warrants are treated as equity instruments. Accordingly, the Public Warrants are not marked-to-market each reporting period, thus there is no impact to earnings. Any future exercises of the Public Warrants will be recorded as cash received and recorded in Cash and cash equivalents, with a corresponding offset to Additional paid-in capital in equity.

BMTX’s revenues from interchange and card revenue, servicing fees from Partner Bank, account fees, and university fees are within the scope of FASB ASC 606, Revenue from Contracts with Customers. The Company recognizes revenue in accordance with ASC 606 when the performance obligations related to the transfer of services under the terms of a contract are satisfied. Some obligations are satisfied at a point in time while others are satisfied over a period of time. Revenue is recognized as the amount of consideration to which the Company expects to be entitled to in exchange for transferring services to a customer. The Company’s customer contracts do not contain terms that require significant judgment to determine the variability impacting the transaction price. A performance obligation is deemed satisfied when the control over services is transferred to the customer. Control is transferred to a customer either at a point in time or over time. To determine when control is transferred at a point in time, the Company considers indicators, including but not limited to the right to payment, transfer of significant risk and rewards of ownership, and acceptance by the customer. When control is transferred over a period of time, the output method is used to measure progress for the transfer. The measure of progress used to assess completion of the performance obligation is based on time over the period of service. We assess our revenue arrangements against specific criteria in order to determine if we are acting as principal or agent. The Company determined that it is the agent in contracts for interchange and card revenue, and presents these revenues net of related expenses under ASC 606.

For the twelve months ended December 31, 2021 and 2020, BMTX recognized proceeds of $15.7 million and $19.7 million (As Restated), respectively, from collaborative arrangements. These proceeds include $5.3 million and $3.5 million (As Restated), respectively, in revenues, primarily recorded in Other revenue and Interchange and card revenue on the Consolidated Statements of Income (Loss) and $10.4 million and $16.2 million (As Restated), respectively, in expense reimbursements, primarily recorded in Salaries and employee benefits and Professional services on the Consolidated Statements of Income (Loss).

The Company uses share-based compensation, including stock, restricted stock units and performance stock units, to provide long-term performance incentives for its employees and directors. Share-based compensation is recognized on a straight-line basis over the requisite service period of the award based on their grant-date fair value for time-based awards. Compensation related to performance-based awards are recognized over the period the performance obligation is expected to be satisfied. Forfeitures are recognized as they occur. Share-based compensation expense is included in Salaries and employee benefits. In addition, the holders of restricted shares may elect to surrender a portion of their shares on the vesting date to cover their income tax obligations.

The provision for operating losses represents BMTX’s payments for losses resulting from fraud or theft-based transactions that have generally been disputed by BMTX serviced deposit account holders, as well as an estimated cost for disputes that have not been resolved as of the end of the reporting period. The estimate is based on historical rates of loss on such transactions. The estimated exposure was $0.1 million and $0.4 million at December 31, 2021 and 2020 respectively; the changes period over period are presented within Provision for Operating Losses on the Consolidated Statements of Income (Loss).

In 2021, BMTX announced the signing of a definitive agreement to merge with First Sound Bank, a Seattle, Washington-based community business bank. The transaction is subject to regulatory approvals and other customary closing conditions and is expected to close in 2022. In connection with the merger, BMTX incurred $0.1 million in merger and acquisition expenses. In 2020, BMTX and Customers Bank entered into an Agreement and Plan of Merger with Megalith Financial Acquisition Corp. BMTX incurred $0.7 million in merger and acquisition expenses in 2020 related to the merger agreement with Megalith Financial Acquisition Corp. All merger related costs are included within Merger and acquisition related expenses on the Consolidated Statements of Income (Loss).

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes.” The ASU is expected to reduce cost and complexity related to the accounting for income taxes by eliminating the need for an organization to analyze whether certain exceptions apply in a given period and improving financial statement preparers’ application of certain income tax-related guidance. This ASU is part of the FASB’s simplification initiative to make narrow-scope simplifications and improvements to accounting standards through a series of short-term projects. For public business entities, the amendments are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company adopted the standard on January 1, 2021. The adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures.

ASU 2020-04 - Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. This ASU is effective as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact that ASU 2020-04 may have on its consolidated financial statements and related disclosures.

In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity.

This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares.

The Company incorrectly presented certain contract liabilities, accounts receivable, and accounts payable positions with our Partner Bank, which is a related party, and for which gross presentation is required as net Payable to Partner Bank on the Company’s Consolidated Balance Sheets for the periods ended December 31, 2020, and March 31, June 30, and September 30, 2021. These related party balances should be separately presented as Accounts receivable, net, Deferred revenue, current, and Accounts payable and accrued liabilities on the Company’s Consolidated Balance Sheets.

In accordance with Staff Accounting Bulletin ("SAB") No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, the Company evaluated these misstatements, and based on an analysis of quantitative and qualitative factors, determined that the impact of these misstatements was material to its reporting periods ended December 31, 2020, and March 31, June 30, and September 30, 2021.

These adjustments impacted Interchange and card revenues, Technology, processing, and communication expense, and the related impact to Income tax expense on the Company’s Consolidated Statements of Income (Loss) with a net adjustment to previously reported net income (loss) of $(0.4) million, $0.3 million, $(0.3) million, and $0.5 million for the twelve months ended December 31, 2020 and interim reporting periods for the three-months ended March 31, 2021, six-months ended June 30, 2021, and nine-months ended September 30, 2021, respectively.

See Note 16 - Restatement of Previously Reported Consolidated Financial Statements for restatement of the Company's previously reported consolidated financial statements that were impacted by these misstatements.

(amounts in thousands)						Beginning Balance			Additions			Reductions			Ending Balance
Allowance for doubtful accounts
2021						$	—		$	171		$	(92)		$	79
2020						$	—		$	26		$	(26)		$	—

(amounts in thousands)						Expected Useful Life						December 31, 2021						December 31, 2020
Leasehold improvements						5 years						$	28					$	28
Furniture, fixtures and equipment						10 years						243						243
IT equipment						3 to 5 years						1,813						1,675
												2,084						1,946
Accumulated depreciation												(1,738)						(1,545)
Total												$	346					$	401

Depreciation is recorded in Occupancy on the Consolidated Statements of Income (Loss). For the twelve months ended December 31, 2021 and 2020, BMTX recorded depreciation expense of $0.2 million and $0.3 million, respectively.

The components of developed software were as follows:

(amounts in thousands)						Expected Useful Life						December 31, 2021						December 31, 2020
Higher One Disbursement business developed software						10 years						$	27,400					$	27,400
Internally developed software						3 to 7 years						41,683						40,104
Work-in-process												421						1,620
												69,504						69,124
Accumulated amortization												(40,911)						(29,467)
Total												$	28,593					$	39,657

Amortization expense is reported in Technology, communication and processing on the Consolidated Statements of Income (Loss). For the twelve months ended December 31, 2021 and 2020, BMTX recorded amortization expense of $11.4 million and $11.0 million, respectively. There was $0.2 million and $3.7 million of impairment recognized for the twelve months ended December 31, 2021 and 2020, respectively.

Goodwill represents the excess of the purchase price over the identifiable net assets of the businesses acquired through business combinations accounted for under the acquisition method. Other intangibles, net represent purchased assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. We have one intangible asset which is being amortized on a straight-line basis over twenty years.

Goodwill is reviewed for impairment annually as of October 31 and between annual tests when events and circumstances indicate that impairment may have occurred. There was no goodwill impairment for the twelve months ended December 31, 2021 and 2020.

Other intangibles, net includes assets subject to amortization are reviewed for impairment under FASB ASC 360, Property, Plant and Equipment. There was no impairment for Other intangibles, net for the twelve months ended December 31, 2021 and 2020.

The components of Other intangibles, net as of December 31, 2021 and 2020 were as follows:

(amounts in thousands)						Expected Useful Life						December 31, 2021						December 31, 2020
Customer relationships – universities						20 years						$	6,402					$	6,402
Accumulated amortization												(1,653)						(1,332)
Total												$	4,749					$	5,070

Other intangibles, net amortization expense is reported in Other expense on the Consolidated Statements of Income (Loss). For the twelve months ended December 31, 2021 and 2020, BMTX recorded amortization expense of $0.3 million and $0.7 million, respectively.

The university customer relationships will be amortized in future periods as follows:

2022			$	320
2023			320
2024			320
2025			320
2026			320
After 2026			3,149
Total			$	4,749

At December 31, 2021, BMTX leased two offices under operating leases. The leases consist of 5-year lease terms with options to renew the leases or extend the term annually or with mutual agreement. The leases include variable lease payments that are based on an index or rate, such as an annual increase in operating expenses over the initial lease year’s expenses. Variable lease payments are not included in the lease liability or right-of-use (“ROU”) asset and are recognized in the period in which the obligations for those payments are incurred. BMTX’s operating lease agreements do not contain any material residual value guarantees or material restrictive covenants. As BMTX’s operating leases do not provide an implicit rate, BMTX utilized the incremental borrowing rate of its former parent based on the information available at either the adoption of FASB ASC 842, Leases or the commencement date of the lease, whichever was later, when determining the present value of lease payments.

The following table summarizes operating lease ROU assets and operating lease liabilities and their corresponding classification on the Company’s Consolidated Balance Sheets:

(amounts in thousands)						Classification						December 31, 2021						December 31, 2020
Assets:
Operating lease ROU assets						Other assets						$	398					$	1,218
Liabilities:
Operating lease liabilities						Operating lease liabilities						$	416					$	1,131

Operating lease expenses are reported in Occupancy on the Consolidated Statements of Income (Loss). For the twelve months ended December 31, 2021 and 2020, BMTX recorded lease expenses related to operating leases of $1.0 million and $0.9 million, respectively.

The maturities of non-cancelable operating lease liabilities were as follows at December 31, 2021:

(amounts in thousands)						December 31, 2021
2022						$	418
Total minimum payments						418
Less: interest						(2)
Present value of lease liabilities						$	416

For the twelve months ended December 31, 2021 and 2020, BMTX paid $0.7 million and $1.4 million (As Restated) in cash pursuant to its operating lease liabilities. These cash payments were reported as cash flows used in operating activities in the Consolidated Statements of Cash Flows.

December 31, 2021

December 31, 2020

Weighted average remaining lease term (years)

Operating leases

0.6 years

1.6 years

Weighted average discount rate

Operating leases

1.0

%

1.4

%

The Consolidated Statements of Changes in Shareholders’ Equity reflect the reverse recapitalization as of January 4, 2021, as discussed in Note 1 - Description of the Business and Merger Transaction. Since BMTX was determined to be the accounting acquirer in the transaction, all periods prior to the consummation of the transaction reflect the balances and activity of BMTX (other than shares which were retroactively restated in connection with the transaction).

In connection with its January 4, 2021 divestiture of the Company, Customers Bank, the Company’s former parent, granted 1,317,035 of the merger consideration shares of the Company it received to certain employees and executives of the Company. The share-based compensation award is subject to vesting conditions, including a required service condition from award recipients through January 3, 2023. The grant date fair value of the award, totaling $19.6 million, will be recorded as share-based compensation expense in the Company’s Consolidated Statements of Income (Loss) on a straight-line basis over the two year post-grant vesting period, net of any actual forfeitures. The shares awarded are restricted until fully vested, and none of the shares issued under this award are vested at December 31, 2021. In addition, the holders of restricted shares may elect to surrender a portion of their shares on the vesting date to cover their income tax obligations.

For the twelve months ended December 31, 2021, the share-based compensation expense related to these awards totaled $9.5 million. In addition, and in connection with the January 4, 2021 divestiture of the Company, Customers Bank accelerated the vesting for existing restricted stock units and stock options previously granted to certain employees of the Company. The share-based compensation expense, net of forfeitures, associated with the accelerated vesting totaling $0.8 million was included in the Company’s stand-alone financial statements as a component of Salaries and employee benefits.

			Number of Awards						Weighted-Average Grant-Date Fair Value Per Award
Balance as of December 31, 2020			—						$	—
Granted			1,317,035						$	14.87
Vested			—						$	—
Forfeited			(33,500)						$	14.87
Balance as of December 31, 2021			1,283,535						$	14.87

Initially, the aggregate number of shares of common stock that may be issued pursuant to stock awards under the Equity Incentive Plan will not exceed 10% of the issued and outstanding shares of our common stock. Grants were made under the Equity Incentive Plan for the twelve months ended December 31, 2021 as described within Restricted Stock Units below. There were no grants made under the Equity Incentive Plan during the twelve months ended December 31, 2020.

			Number of RSUs						Weighted-Average Grant-Date Fair Value Per RSU
Balance as of December 31, 2020			—						$	—
Granted			707,600						$	8.96
Vested			—						$	—
Forfeited			(3,000)						$	9.44
Balance as of December 31, 2021			704,600						$	8.96

In accordance with FASB ASC Topic 480, Distinguishing Liabilities from Equity, the Private Warrants are accounted for as liabilities and will be marked-to-market each reporting period with the change in fair value recognized in earnings. In general, under the mark-to-market accounting model, as our stock price increases, the warrant liability increases, and we recognize additional expense in our Consolidated Statements of Income (Loss) – with the opposite when our stock price declines. Accordingly, the periodic revaluation of the Private Warrants could result in significant volatility in our reported earnings.

Opening Balance Sheet Impact: As of the date of our merger on January 4, 2021, the $30.8 million fair value of the Private Warrants was recorded as a warrant liability on our Consolidated Balance Sheets in Liability for private warrants with a corresponding offset to Additional paid-in capital within equity. The fair value of the Private Warrants was estimated using a modified version of the Black-Scholes option pricing formula. We assumed a term for the Private Warrants equal to the contractual term from the merger date and then discounted the resulting value to the valuation date. Among the key inputs and assumptions used in the pricing formula at January 4, 2021: a term of 5.0 years; volatility of 20%; a dividend yield of zero; an underlying stock price of $14.76; a risk free interest rate of 0.38%; and a closing price of the Public Warrants of $2.50 per share.

Income Statement Impact: Subsequent to the close of the merger, any change in the fair value of the Private Warrants is recognized in our Consolidated Statements of Income (Loss) below operating profit as “Gain on fair value of private warrant liability” with a corresponding amount recognized in the liability account on our Consolidated Balance Sheets. The Private Warrant liability is presented in the account Liability for private warrants in the long-term liabilities section of our Consolidated Balance Sheets. During the twelve months ended December 31, 2021, we recorded a net non-cash gain of $17.2 million on the revaluation of the Private Warrants.

Balance Sheet Impact: As noted above, the change in the balance of the warrant liability on our Consolidated Balance Sheets is due to the change in fair value of the underlying Private Warrants. When warrants are exercised, the fair value of the liability will be reclassified to Additional paid-in capital within equity. The cash received for the exercise of warrants is reflected in Cash and cash equivalents, and the corresponding offset is also in Additional paid-in capital in equity.

Shareholders’ Equity Impact: The impact to Additional paid-in capital as of the opening balance sheet date is described above. Any future exercises of the Private Warrants will result in a reduction of the Private Warrant liability on the Consolidated Balance Sheets with a corresponding increase to Additional paid-in capital.

In accordance with FASB ASC Topic 480, Distinguishing Liabilities from Equity, the Public Warrants are treated as equity instruments under U.S. GAAP. Accordingly, the Public Warrants are not marked-to-market each reporting period, thus there is no impact to quarterly earnings. Any future exercises of the Public Warrants will be recorded as cash received and recorded in Cash and cash equivalents, with a corresponding offset to Additional paid-in capital in equity.

As described in Note 2 - Basis of Presentation and Significant Accounting Policies, BMTX recognizes operating revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers.

						Twelve Months Ended December 31,
						2021						2020
(amounts in thousands)												(As Restated)
Revenues:
Revenue recognized at point in time:
Interchange and card revenue						$	28,078					$	25,864
Servicing fees from Partner Bank						45,105						22,465
Account fees						10,668						11,308
University fees - disbursement activity						1,401						1,240
Other revenue						5,443						1,480
Total revenue recognized at point in time						90,695						62,357
Revenue recognized over time:
University fees - subscriptions						4,292						4,080
Total revenue recognized over time						4,292						4,080
Total revenues						$	94,987					$	66,437